The Lesson of Penn Square Bank
http://realmoney.thestreet.com/articles/12/12/2014/lesson-penn-square-bank
I remember. Things were grim in Texas for most of the mid-80’s.
The so called oil & gas boom of the late 70’s and early 80’s was really more of a money boom as big banks searched for places to put their money as the rest of the economy was in the doldrums. They got carried away and pretty wreckless.
And as far as oil and gas it was more of a gas boom because the deregulation of deep gas. 15,000 ft or more as I recall. Pipelines were signing take or pay contracts if you would drill a well for as much as $10 mcf which they backed out of and the whole house of cards came tumbling down.
I lived in OKC at the time but didn’t work in the oil industry. However, everything else was touched by it so the whole area economy went in the dumper in a big way. I was just glad to keep a job. The interconnections among the banks and high finance types was a marker for what we all observed in 2008-9. A flimsy house of cards that is easily blown over.
I remember this better than I would like to. July 5, 1982 was the beginning of the end for that season. We had seen the signs but this was a sharp demarcation day. The examiners came in over the weekend and closed the bank. Monday was a black day. My office was on Classen.